Business Social Responsibility

Acting Socially Responsible

Businesses need to act socially responsible when engaging with various stakeholders. These stakeholders are:

1. Investors
2. Employees
3. Suppliers
4. Customers
5. Government
6. Local Communities

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7. Investors: Businesses have a responsibility to their investors who provide the capital necessary for setting up and expanding operations. They must offer honest information about financial performance and share success through reasonable dividends, allowing investors to make informed decisions.
8. Employees: Businesses must treat employees fairly, paying them wages that reflect their qualifications and efforts while ensuring safe working conditions and health benefits. Companies like Lidl, Aldi, and IKEA exemplify this by paying their Irish staff a living wage above the legal minimum.

9. Suppliers: Businesses should pay suppliers on time and avoid exploiting smaller suppliers by paying a fair price for their goods. For example, The Body Shop sources ingredients from small-scale, disadvantaged suppliers, ensuring fair payment and community support.
10. Customers: Businesses must provide safe, high-quality products and services at reasonable prices without misleading customers. An example of unethical behaviour is Neurofen, which charged double for a painkiller identical to its standard product, misleading consumers about its value.
11. Government: Businesses should comply with legal regulations, pay taxes fully and on time, and contribute positively to the infrastructure and economic stability of the country. They must avoid unethical practices, such as the National Irish Bank's encouragement of tax evasion in the 1990s.
12. Local Communities: Businesses should support local communities by preserving the environment, providing local employment, and buying from local suppliers. For instance, IKEA opened a store in Ballymun and hired many locals, thereby contributing to community growth and economic stability.

Advantages of being a Socially Responsible Business

Some advantages of being a socially responsible business include:

• Increased Sales: Social responsibility enhances a company's reputation, leading to increased customer loyalty and higher sales. Consumers are more likely to support businesses that demonstrate ethical practices and contribute positively to society.
• Reduced Costs: Implementing sustainable practices can lead to cost savings. For instance, reducing waste, improving energy efficiency, and optimising resource use can lower operational costs over time.
• Easier to Attract and Retain Employees: Businesses that are socially responsible often attract and retain top talent. Employees prefer to work for companies that align with their values and contribute to a positive social impact, leading to increased job satisfaction and lower turnover rates.
• Easier to Attract Capital: Investors are increasingly looking to invest in companies with strong social responsibility practices. Being socially responsible can make it easier for businesses to attract capital from socially-conscious investors who see long-term value in ethical and sustainable practices.